A presentation on 'What are the market and technology drivers for the connected home?' as part of the 3rd Annual Digital Lifestyle Forum - Beyond The Connected Home at The Langham Hotel, London on 29th June 2006. This presentation provided a perspective of: the UK Broadband Market; Connected Home Drivers; ntl network assets – a Cableco and a Telco; The Home of the Future and Broadband Packaging Strategies.

1. Dowshan Humzah – 29th
June 2006
What are the market and technology drivers for the
connected home?
Dowshan Humzah
Director, Strategy and Planning - Products
3rd Annual Digital Lifestyle Forum - Beyond The Connected Home
The Langham Hotel, London
29th
June 2006

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Dowshan Humzah – 29th
June 2006
Agenda
1. The UK Broadband Market
2. Connected Home Drivers
3. ntl:Telewest network assets – a Cableco and a Telco
4. The Home of the Future
5. Broadband Packaging Strategies

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June 2006
1: The UK Broadband Market
 Broadband Growth
 Internet Penetration
 Q1 2006 Residential Market Share
 Intense Competition

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June 2006
Broadband Growth
Sources: Oftcom, National Statistics, Enders Analysis, Forrester, Jupiter, Strategy Analytics and ntl analyses. Note: Business ADSL included
UKBB/DUHomes(million)
1.2
2.8
5.5
8.9
13.8
15.3
16.4 16.9
9.3 9.7
8.4
6.1
4.1
2.9
2.2 1.6 1.5
11.9
2002 2003 2004 2005 2006 2007 2008 2009 2010
Broadband Dial-Up
 2005 – a record year for new subscribers
 Over a third of UK homes now have broadband
 Strong growth expected

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June 2006
Internet Penetration
UKInternetPenetration(%ofUKhomes)
43%
51%
56%
60%
5%
11%
22%
36%
2002 2003 2004 2005
Total Broadband
40%
31%
36%
Cable areas Non-cable areas UK average
 Infrastructure competition
and choice has aided
increased broadband
penetration
 35% in cable areas vs. 23%
in non cable (i.e. DSL only)
areas

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June 2006
Note: Other DSL includes residential ISP’s only
Sources: BT, Telewest, Tiscali & Wanadoo results; AOL press releases; ntl estimates; ntl accounts
Q1 2006 Residential Broadband Market Share
 ntl remains market leader
BT Retail
21.3%
AOL
14.9%
Wanadoo
10.4%
ntl:Telewest
32.1%
Tiscali
9.8%
Other DSL
11.5%
927 986 1,093
2,028
3,046
1,420
Tiscali Wanadoo Other DSL AOL BT Retail ntl:Telewest
%MarketShareCustomers(‘000)

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June 2006
Intense Competition
*Based on select leading ISP offers. Media source: Thomson Intermedia
£63.15 £63.15 £63.83 £63.83
£52.85 £53.08
£40.80 £39.36
£21.19 £21.19
£15.13
£8.07 £7.00
36 35
31
46
£36
£54
£32
£34 £35 £36
£32
£38
£42
Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06
Price per Mb* Media Spend £m
 Bandwidth is more affordable
 Prices down, speeds up and media spend heavy!

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June 2006
2: Connected Home Drivers
 Access Competition Impact – Connected Home Drivers
 Broadband User Behaviour (ntl Broadband Base)
- Average Time on Broadband Service
- PC Penetration
- Home Networking
- Always-On PCs
- Frequency of Internet Use

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June 2006
Access Providers Impact – Connected Home Drivers
 Providers bundle networked
services to drive ARPU/retention
 Wireless networking
 VOIP
 Home security
 IP TV
 Online storage
512k 10Mb
Song 1min 20 4 secs
CD 12 mins 36 secs
Movie 3.5 hours 9 mins
 Higher speeds make audio/video
transfer feasible
 Access provider competition is helping to drive home connectivity
 The future is the ‘multi-play’
 One very high speed connection, one bill, multiple integrated services
 ntl:Telewest already provides this

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Average Time on Broadband Service
19
22
23
2Mb 4Mb 10Mb
Averagetimeonbroadband(months)
 Early majority have higher speed connections

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June 2006
PC Penetration
38% 39%
59%
68%
DU 2Mb 4Mb 10Mb
 Early majority and those on higher tiers are likely to have more than 1 PC
%customerswithmorethanonePCathome

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Home Networking
13%
26%
39%
DU 2Mb 4Mb 10Mb
Not
recorded
 …And to have a home network
%customerswithahomenetwork

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June 2006
Always-On PCs
14%
23%
30%
45%21%
33%
36%
32%
66%
44%
34%
23%
DU 2Mb 4Mb 10Mb
Only when in front
of PC
Generally on when
at home
All the time, or
during the day
 …And more likely to keep the PC on all day
%customerskeepingPConallday/
whenathome/whenusing

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June 2006
Frequency of Internet Use
52%
66%
77%
83%
DU 2Mb 4Mb 10Mb
 …And to use the Internet more frequently
%customersusingtheinternet
severaltimesperday

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3: ntl:Telewest Network assets – a Cableco and a Telco…
 ntl:Telewest’s network vs. BT’s network
 ntl:Telewest’s speed advantage over BT (for ADSL2+)
 Distribution of Telephone (Local Loop) Length in the UK

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June 2006
ntl:Telewest’s network vs. BT’s network
 ntl:Telewest already delivers triple play….moving to quad play
 Sky, BT and Wanadoo/Orange are chasing this space in the UK
 BT (and LLU operators) can only match ntl:Telewest in mass deployment of faster DSL²
with further significant investment in deeper fibre and shorter copper
 This is not currently planned
Depth of fibre
Network Asset Ntl:Telewest
• Deeper, therefore closer to customer
• All the way through to all street cabinets
Length of copper
• Shorter copper enabling higher speeds
• c.95% of homes <1km¹
Access architecture
• Dual access – triple play already delivered
• Both coaxial cable (DOCSIS) and copper
(ADSL)
• Only through to exchanges
• Then copper through to street cabinets
• Longer copper
• c.5% of homes <1km
• Copper (ADSL) only
BT
¹Source: ntl Networks analysis 2005. ²Defined as 18Mb+ services to homes with short copper i.e. c.<1km.

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0
5
10
15
20
25
30
12 11 10 9 8 7 6 5 4 3 2 1
Loop Length (kilo feet)
DataRateMb/s
ADSL2+
ADSL2
ntl potential x5
speed advantage
95%¹
<1km
95%
< 5.6km
50%
< 3.25km
5%¹
<1km
ntl short loop copper: c.7.2m homes
Homentl Network
HomeBT Network¹
c.4.5Mb/s
up to 24Mb/s
ntl’s speed advantage over BT (for ADSL2+)
¹BT Evolving Access Networks Presentation 2005. Rates in practice will be lower than these theoretical performance figures
BT/LLU short loop copper: c.1.3m homes

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June 2006
4: The Home of the Future
 The Home of the Future
 Drivers
 The New Communications Environment
 Future Broadband Bandwidth Requirements
 Triple Play/Cross Product Propositions

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June 2006
The Home of the Future
 The idea of the ‘home of the future’ has a long history
 But has always remained in the future
 Answers magazine (1893) enthused about the electrical home of the future¹
 "fitted throughout with electricity, electric stoves in every room…can be lighted by
pressing a button at the bed side…doors and windows fitted with electric fastenings."
 Designers of the 'miracle kitchen' (American National Exhibition - Moscow)¹
 "household chores in the future will be gone for the American housewife at the touch of a
button or the wave of a hand“
 The Internet and ‘digitising’ of information, communications and
entertainment is helping to re-ignite this vision
 Many companies have a vision of a ubiquitous value network, with all devices connected
so that you can enjoy content anytime, anywhere
¹ Economist Technology Quarterly 18 Sept 2004 – reported Moscow 1959

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Drivers
 There are 5 key elements to the emerging phenomenon of the digital ‘home
of the future’
Single high bandwidth pipe
Elements Key driving factors
 DOCSIS/ ADSL2+ provides high speed/dedicated services
 Carries multiple services of data, video and voice
Portable devices that connect
automatically
 Increased penetration of MP3 players, digital cameras, PDAs
 Drive to standardisation to aid simple, seamless connectivity
Content/applications migrate to portable
devices at edge of the network
 Rising bandwidth and shrinking storage costs leading to more
smart and fewer physical devices such as DVDs/CDs
Wireless channel
 Provides for mobile networking in home
 18% of European homes forecast to have connected home
networks by 2009¹
Closed wired network
 High bandwidth allows for HDTV entertainment services
 Quality of service can be guaranteed
¹Strategy Analytics

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Source: Strategy Analytics, Emerging Frontiers Jan 2005
The New Communications Environment
 The current communications environment is not conducive for the
‘home of the future’
 Separate
 Incompatible
 Patchwork
 Seamless
 Converged
 Compatible
 Interconnected

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Source: Strategy Analytics, Emerging Frontiers Jan 2005
The New Communications Environment / cont.
 A shift to greater intelligence and interconnectedness will improve the
customer experience
 Standalone Devices
 Increasing Barriers to Use
 Limited Compatibility
 Minimal Intelligence
 Interconnected Systems
 Embedded Intelligence
 Seamless Content Access
 Adaptive Capability

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Future Broadband Bandwidth Requirements
Single Person home
Household Bandwidth Requirements Total
 4.5Mb
Two person home One broadcast TV channel being recorded 3.5Mb
One broadcast TV channel (live sports quality) 3.5Mb
Internet browsing (BBC media player) 1.0Mb
Music download in progress 0.5Mb
8.5Mb
Two parents with 2
or 3 children
One HDTV channel being viewed (MPEG4) 8.0Mb
One broadcast channel being recorded 2.0Mb
Multi-play online game via PS3 1.0Mb
Internet browsing (BBC media player) 1.0Mb
VoIP call in progress 0.5Mb
12.5Mb
Source: BT Wholesale presentation April 2005
One broadcast TV channel (live sports quality) 3.5Mb
Music download in progress 0.5Mb
Internet browsing (email/search) 0.5Mb
 Consumer segments and mass applications may drive demand for greater
bandwidth (for applications over IP)

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June 2006
Triple-Quad Play Product Propositions
Internet
TV
Telephony
- CPE
-Video conf.
-Voice/video
Over IP
-Wifi/3G/
Bluetooth
‘mobility’
-FMC
-HDTV
-IP VoD
-Share photos/
music
-TV over wi-fi
Communication Entertainment
Information/Communication
-CLI/bill on TV
Traditional outward focus
Cross product / converged focus
 Evolving technology platforms
will help to support an increased
cross product / converged focus
 For e.g.
Photobox on
Internet and TV

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5: Broadband Packaging Strategies
 ntl Product Portfolio - 2006
 Shoreditch Digital Bridge
 The Future
 So Who Lives in a Connected Home Today?

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June 2006
ntl product portfolio - 2006
Adding value to access
 A market leading portfolio meeting needs of customers
 …high speed
 …unlimited usage
 …content and applications for high bandwidth
Tier 1 £14.99 512Kb[1GB]
Tier 2 £17.99 2Mb[Unlimited]
Tier 3 £24.99 4Mb[Unlimited]
Tier 4 £34.99 10Mb[Unlimited]

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SDB Vision
 To bridge the digital divide by increasing take-up of public services, enabling efficiencies for providers
and generating new delivery models for Government
Core Proposition
 Deliver consumer centric and public sector services - alongside commercial services
 Triple play proposition (key focus on local community content and computer on TV services)¹
Platform²
 Utilise the TV for delivery of majority of ‘online’ services
 Cable would be preferable to LLU (given performance, capacity and cost)²
Shoreditch Local TV
Content / Channels
 Updates from Borough Commander/Police
 Online access to local CCTV cameras in the neighbourhood
Crime Channel
 Increase residents’ disposable income through ‘group buying’ of
utilities/services and encourage full take-up of benefits entitlement
 Improved household budgeting
Money Channel
 ‘What’s On’ guide to the local area
 Interaction with the local MP and Mayor
Local Channel
 Standard DTV/VoD entertainment servicesDigital TV
 Deliver broadband (Full Internet and MS office apps) to the TV
 Mitigate fixed cost of a PC for low income residents
Computer on TV
Other TV Services
Shoreditch Digital Bridge Proposition
 Consumer proposition focuses on ‘bringing online’ the ‘digitally
disenfranchised’

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SDB Consumer Offering: Look and Feel
The consumer experience is controlled via the remote control/keyboard allowing full TV and PC functionality

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The Future
What’s coming?
 Innovations in connectivity
 Continuing growth of wireless
home-networking
 Greater focus on VOIP
 Arrival of IP VOD
What’s needed?
 Even higher speeds – up & down
 Joint action on wireless security
 Clarity on broadband speed claims
 Video rights holders to embrace the
internet

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So Who Lives in a Connected Home Today?
 Mostly early-adopters
 Higher speeds, wireless (in-home) packages and bundled services are
helping attracting first timers
 We need to act together to sustain these new connected families
 Cable will continue to lead the way
 21st
century-network – already delivered
 Higher speeds and new services launched and on trial now
 Increasing popularity of the triple play
– UK Cable players provide triple play already
– Others are aiming to follow: Sky, Wanadoo, BT

31. Dowshan Humzah – 29th
June 2006
Thank you
Dowshan Humzah
Director, Strategy and Planning - Products
Tel: +44 (0)7976 202595